“We’re dead in the water right now.” That’s how Glen Fishman, managing partner of Dornoch Holdings, described to Redevelopment Agency commissioners his firm’s situation with The Savoy.
In a rare appearance at the agency’s meeting Wednesday night, Fishman was invited to provide an update on the firm’s stalled projects and activity at its properties. He started with the good news (filling rental properties), but we’ll get to that in our next post. For now, the bad news.
“We’re a little stuck here, I wish I had better news,” Fishman told commissioners, adding that they’re still negotiating with Wachovia. Rahway’s real estate fundamentals still exist, with its location and proximity but housing prices have made it hard to get people to invest. “People are still confident in Rahway, it’s just the economics,” he said. Condos can’t be built when they’re selling for $150,000 a unit, he said, but expressed confidence in “getting something there” in 12 months.
Dornoch spent a lot of money acquiring properties along Main Street for the four-story, 36-unit development, many of which were razed. Archaeological and historical issues relating to cisterns at the Savoy site cost Dornoch $1 million and a year’s time, he claimed, which “blew the budget on the Wachovia loan.” At one point there was a possibility of financing from Valley National for rental apartments but the deal could not get done, he said.
Fishman told commissioners he hopes “at some point the economics make sense, whether selling to another developer who can make it work” or otherwise. Dornoch has fielded offers from some local developers, he said, but so far three offers that have been made “have not been acceptable to the lender.”
(By my estimate, via PropertyShark and other sites, Dornoch acquired almost 20 downtown parcels at a total cost of almost $9 million or more — mine may be an incomplete list — pretty much the height of the real estate market in 2006.)
Redevelopment Agency Chairman William Rack asked if the steel beams, which went up at The Savoy site in summer 2008, might be taken down at some point, assuming they probably won’t be used in whatever ends up at the site. Fishman said it’s not necessarily a certainty that the steel would go unused. Steel doesn’t really go bad so it still has value, he said, adding that Dornoch doesn’t have the money to remove it anyway, and doing so might actually reduce the value of the property.
By removing the structural eyesore, how does it reduce the value of the property?
shouldn't there be a performance bond Rahway can cash in on?
"Steel doesn't really go bad so it still has value, he said, adding that Dornoch doesn't have the money to remove it anyway, and doing so might actually reduce the value of the property."So this what things have come to …
I lived only a few doors away from that site until recently. I can't tell you how depressed and downtrodden it makes that area of Main Street appear. I also don't understand how removing those beams can possibly reduce the value of the property. It just makes no sense to me.
Sivyaleah,I agree with you completely. They seem to be saying that a piece of land with huge chunks of steel sitting on it is more valuable than a piece of land without those chunks of steel sitting on it.While I understand how that may technically be true, what I don't understand is why the govt of Rahway lets them get away with being such an eyesore for 2 years. It is unacceptable.
Someone looking at the property to buy it will only see foundations/footings & steelwork that they will be obligated to remove..more work & money that they don't want to be strapped with.I wonder what was the response of the Redevelopment Agency when they were given Fishman's explaination.I agree, totally unaccepatble.
The way I understood Fishman was that dismantling the steel might reduce the value of the property to a developer, in that a new developer may still be able to use the steel that's there.The only comment from commissioners was the chairman's initial question of whether the the steel could be removed.Fishman did say that since the foundation has been exposed that something might have to be done with it.
Ridiculous about the steel. Ask yourself these 2 simple questions.1. Would a homeowner be allowed to leave a structure up that looks like that?2. If your were to invest in Rahway and drove around and saw that mess what you keep driving to the next city?Nothing but more excuses from a developer who recieved special treatment from our Mayor and his team.The Redevopement Director should step down ASAP. Failure at the Carriage House with a 45 million Bankrupt deal,and now this mess.We have been hearing exuses from Dornoch since 2007, BEFORE the recession even started. This builder has a long history of being un reliable and broken promisesOur new Mayor needs to act and get results. Mayor Proctor said on Monday night " he wants to end business as usual".Well heres his chance.First get rid of the people ( the developer, the RRD Director)who have failed. Thats how the real business world operates. But this is Rahway, they do things differant……
http://www.nj.com/news/index.ssf/2011/01/after_a_decade_of_attempts_rah.htmlAfter a decade of attempts, Rahway renaissance struggles to take hold
At least were not detroit !